Ballmer regrets not redeploying more talent to Windows Mobile in early 2000s

For Microsoft, Windows Vista took priority over Mobile. Years later, Steve Ballmer regrets that decision.

As Microsoft’s 2013 Financial Analyst Meeting wraps up, outgoing CEO Steve Ballmer fielded questions from the audience of investors about the company. In responding to one inquiry about Microsoft, its direction and reorganization, Ballmer had an interesting confession regarding the last decade at Microsoft.

Although Ballmer has previously acknowledged that Vista was something he wished he handled differently, in tonight's response he was even more specific. Ballmer regrets not putting more resources into what was then Windows Mobile. Instead, the company had invested its talent and resources into Vista, an OS that would forever blemish the reputation of the company.

It would also cause Microsoft to miss the mobile explosion just a couple years later.

Ballmer gets candid during a Q&A

Ballmer’s response during the Financial Analyst Meeting:

“If there's one thing I guess you would say I regret, I regret that there was a period in the early 2000s when we were so focused on what we had to do around Windows that we weren't able to redeploy talent to the new device called the phone. That is the thing I regret the most. The time we missed is the time we were working on what became Vista and I wish we had resources slightly differently deployed. It would have been better for Windows and our success in other form factors.”

Indeed, Windows Mobile (and Windows Pocket PC before that) was way ahead of its time. Back in 2002, it was Dell leading the way with the Axim X5. That device was spec’d with a 300 MHz Intel XScale processor, 32 MB RAM, 32 MB flash ROM, a Type II CompactFlash slot, an SD/MMC slot, a 16-bit QVGA (240 × 320 dots) TFT. Cost? $279. While that device and subsequent Axims and iPaqs that came after it remained a niche, it was clearly the future and Microsoft at the time owned the market.

Microsoft spent only a little time and money with Windows Mobile in subsequent years, going through a few iterations and stumbling around with non-touch versions of the OS. While the phones at the time were impressive, it was Apple’s iPhone that made that industry take off due to its appeal to the masses. Unfortunately at the time, Ballmer famously mocked Apple, noting that they welcomed the challenge and that the iPhone was “not a smartphone”. Ironically, Apple is doing very well years later and it is now Microsoft who is scrambling to catch up.

There is no argument that Microsoft had missed an opportunity. They focused on desktop when they should have seen mobile as the next big thing. Will they be able to improve? We sure hope so.

Reader comments

Ballmer regrets not redeploying more talent to Windows Mobile in early 2000s

WM was/is a f...ing mess. Only really popular in "industrial" handhelds, even up to know, and hated by everyone who needs to use it. I've seen the guys of all the parcel delivery companies swear at least once a year in front me. One UPS guy even smashed it onto the ground, stomped on it and then apologized that he'll have to come back after he picked up the delivery batch data again he just lost in a system crash from the nearby sorting station...
Heck, some are even still selling SatNavs with that POS excuse of an OS.
The real hip platform back then was Blackberry or Palm; but I guess you knew that already.

Windows Mobile was huge. Had so many options for expandability and tailoring to the consumer. I guess what it comes down to is vision. Sometimes we get so set on what works that our left brain takes over. Oh well...Windows Phone is about to make a comeback. It's now just getting the consumer to see that. That's the tricky part.

Just powering up my Dell Axim X30....got the docking station with the Dell Logo that lights up, circa 2003....Windows Mobile Second Addition, V4.21.1088 (Build 14260.2.0.2), hmmm, thought I had 6.1 on this thing....its running an Intel PXA270 w/64MB, at 312Mhz!

Longhorn was another pie-in-the-sky disaster by Allchin, like Cairo was 10 years earlier. I don't know why the upper levels of MSFT have/had such a hard-on for OO/SQL file systems in Windows. Their implementation metastasizes throughout the code base ... then eveyone wakes up and kills it.
The latest Allchin-style disaster at MSFT is WinRT and its Async model. It too spreads like cancer throughout the code base. Unfortunately, it was not killed prior to release.

Can we knock off the crap about Ballmer "mocking" the iPhone? He's a CEO... publicly he won't complement a competitor.

His actions show exactly how he felt about the iPhone. He haulted production on Windows Mobile and created a new team that built a touch friendly OS in 18 months; the one this site is built on, Windows Phone. That's how he reacted to the iPhone.

You can say he wasn't prepared for the iPhone but once he saw it, he reacted correctly. Saying he "mocked" the iPhone makes it sound like he didn't take it seriously. Blackberry didn't take it seriously... Blackberry is being sold off for scrap.

Microsoft stopped everything they were doing in mobile and reacted quickly to the situation. That's how Ballmer felt about the iPhone.

I sorely miss WM. Started with the 8125 and had every single WinMo HTC slider. I even still have my HTC StarTrk. What they were trying to deliver with WM7 was thoroughly undercut by the iPhone. I would have loved to see what that OS looked like in action.

I think there is no wrong or right decisions, there are only good or bad decisions. Maybe at that time, working on Vista is what he sees the most important thing to do, and Windows Mobile is not the priority. Windows is always the main focus and priority for Microsoft. No one plan to fail, but bad things do happen.

Say what you will about Apple, but their quality and support is second to none. You don't get that with Android. Even if you get a higher end device, good luck getting updates. Samsung really isn't focused (or doesn't care, take your pick) on updates. That's why I think WP's market share can come at Android's expense if MS delivers great devices and even better update support. I believe MS can match what Apple is doing right now. They just need to do it pronto.

I'd rather it WAS just them two, Apple & Microsoft...as far as I'm concerned, they were the only ones that mattered. Not this "Bizarro Microsoft" Google...lol =P
Keeping tabs on the industry, stay sharp.

I don't buy into lack of resources to distribute because they had the money to bring on the talent required to execute regardless of the investment in Vista. They missed the opportunity because they were short sighted. Had they taken the failing Zune at that time and worked on WP instead they would have been years ahead of Apple.

MS needs vision and starts looking at the next big thing. Sure WP will get better and more marketshare over time. But that would be when fhe market foir smartphone and tablet are already saturated and there won't be exponential growth left.
IMO, I would like to see MS to invest in personal robot business. They already has core ingredients: Kinect, TellMe, Robotic Studio, etc...MS should look into marking and selling personal robots. Imaging every household has at least one robot. That would be like the beginning of the 80's when every household started getting a PC. MS was dominating the market back then. But this time around, they should not just sell the software but the hardware and as one package, like how Apple sells the entire experience, from Mac to iOS device.

Sounds good. For some reason it reminds me of the Big Bang Theory episode when Wolowitz went to the emergency room to get his robot hand removed from you know where. Nurse: where's the rest of the robot? Wolowitz: I just created the arm. Nurse: ...and that's all you needed right?

I think Microsoft's image was tarnished well before Vista. Not all of it was their fault but at the end of the day that doesn't matter.
I've been tinkering with iOS 7 on my iPad over the past couple of hours and I've got to say, it's a miserable experience. Basic UI principles, some established by Apple themselves, have been violated.
If this is Apple's future then Microsoft has a lot less to worry about.

Everything happens for a reason... Microsoft is also famous for being third or forth in a marketplace only to dominate later... One only needs to look to gaming consoles, word processors, spreadsheets, server and network operating systems, databases, etc.to see examples of Microsoft once trailing the competition only to later dominate or nearly dominate the market... Microsoft, let's do it again.

I think that mindset still persists. I like the fact that they've tried to speed it up by attaching it directly to Windows but they'll still have to work on it to get out there.

That means getting aggressive and actively pushing out new features and gimmicks for the consumer. Shouldn't be hard for a company with Microsoft's resources. They need to emulate the Google model here and keep pushing out new features. That's the only way to get people talking about your devices. Nokia understood this very well - was quite aggressive in getting things like wireless charging, glance, Pro Cam, Navigation/Maps out to consumers. That's the model Microsoft needs to adapt as opposed to laying back and leaving it up to the OEMs to crack the market. Hopefully, they'll do just that with Nokia under their control.

I loved wm I started with a Treo 700wx then went to a Treo pro 6 months later my brother gave me a touch pro 2 which I accidentally threw away until I couldn't find it, then in '11 I got my focus and still using it to this day but I still have my wm phone still charge my Treo pro every day as a backup

Yeah, I still fire up my Samsung Intrepid from Sprint just to hear the gears turn. Its still a cool looking phone but so slow compared to my Lumia 822. I remember that I wanted Pandora on it so I was able to install the same version that was on my earlier Samsung Ace. That version came from a Samsung Blackjack from AT&T and worked great.

He regrets it but what's really changed? I understand back in the day, WM was the only thing going. Today competition has stepped in and they are not in the mood to give ground, especially when selling phones is how they thrive. Microsoft's mobile division doesn't have the resources in R&D they do. Or so it appears.
They seem to be pushing a self sustaining mobile model as they did with XBOX and thus we are still here, celebrating a distant third while Balmer bemoans what could have been. Pardon me but I'm fresh out of Kleenex..

Vista's issue was that OEMs weren't prepared for its much needed hardware boost. And to the fault of Microsoft, it was unnecessarily heavy and intrusive both on hardware and for users.
Whereas its the complete opposite with Windows 8. It actually has lesser hardware requirements than Windows 7. And driver support was pretty solid right out of the gate.

Yep I agree. But a lot of the hate was unjustified fueled by unfair word of mouth and media hype. Vista RTM was very buggy and the UAC feature (new with Vista) was not well thought out. But once SP1 was released it wa a fine OS, and the UAC always had the option of being disabled (which most people opted to do).

Bottom line: the fear of Vista did not match reality. But its a valuable lesson learned by MS. Perception is 80% of reality. Don't release a product until its ready!

I'm currently running Vista and typing this message on my beloved HP desktop Vista 64 bit Home Premium SP2. It's awesome. I haven't had a single crash or blue screen for over an entire year on this box that I bought used off of Craiglist. It's very speedy, although I do have 8 GB of RAM, but only a dual core AMD processor. I like this OS better than Win 7 in some ways. I think it's beautiful.

After XP, Microsoft's focus was on a radically different version of Windows called Longhorn, this incorportated a lot of new technology and it never really came together. At the same time XP was increasingly being attacked by black hats and so focus shifted to hardening XP in a service pack.
So, with Longhorn not being ready and it having been a long time since XP's release, the decision was made to reset development on Windows Client, basing it on the Windows Server 2003 codebase, which was really stable. So, it's that wasted development on Longhorn that I'm guessing Ballmer is refering to.
Other people are mentioning the problems Vista had after release. There were a lot of pain points to do with Vista being more secure. Most of these went away as developers learnt to work within the sandbox given to them and older programs were updated. Windows 7 reaped the benefit of this.

I find most people that hate on Vita actually can't give you any reason other than "it sucks". I think most of the people just got that from their friend that liked to toil away on Linux builds or the IT guys they knew that's still won't let go of XP.

I built a computer when vista came out. So I didn't have the driver issues that I would have had on my old system. It was a resource hog. And installing 8 meg of ram was a royal pain. It was slow to. Took for ever to boot and was prone to the dreaded bsod. But the worst, and I mean worst part was the security elevation requests that popped up all the time. Don't get me wrong I loved vista, in fact, I'm probably one of the few that did. But it did have issues. Man, I miss that aura screen saver.....

The reason why the iPhone took off was because it was aimed directly at consumers. Back then, companies treated "phone customers" and "business customers" in a different manner. Apple changed that by creating a phone that everyone would want and like. It's not like Windows Mobile or Blackberry weren't good enough for the average consumer - just that everyone advertised and targeted the business customer with them and the interface of the devices showed this. Apple, or Jobs, meanwhile, realized that by pushing out a similar kind of technology to the average customer, he'd be able to expand this niche market. Takes a lot of vision to see that.

Microsoft missed the boat because they weren't prepared for any changes. They thought their cash cows would keep generating profit and exciting customers like they did 10 years ago. The biggest failing of Ballmer is not that he missed "the smartphone explosion", it'll be that he allowed such a conservative and rigid mindset to come into the company. Ballmer has been amazing with numbers but his lack of vision is a critical shortcoming.

Started with. 6.0 then updated to 6.1. Then jumped to 7.0. Updated and then jumped to 8.0. Now. This has all been since 2008. They should have marked it better. What this article leaves out is that bb had a good hold of the market. Especially here in Canada, Back then.

Currently, they're dropping the ball with the fragmented mobile environment. It's a joke that Apple can upgrade everything simultaneously, but I can't get GDR2 on my L920. Sure, Apple may be having hiccups in their system, but everyone with a compatible device is getting iOS7.

That won't ever change. We've covered that endlessly. No one in mobile will ever get that Apple deal again. Not even Samsung can do that. The carriers don't want it and they won't allow it. That's really the end of that discussion right there.

This is my hope with the purchase of Nokia. I love WP and believe in it, but the key to modern day smartphones is the OS. Hardware is something you get and people expect software to extend the life of a device, by at least 2 years. Gone is the days of buying as is. To think that some carriers have proclaimed they are skipping GDR2 for GDR3 shouldn't be optional.

Still, Daniel, even if we don't get the same deal, if WP were to get say... 30% marketshare, then there wouldn't be a month and half time period to wait for the next update. Carriers would care more and they would try to get the update faster. Now of course I'm not talking about GDRs here, the average consumer might not care, but the way IOS 7 was trending on twitter, the average consumer does care about major updates.

I blame the whole culture trend here in North America where carriers are given too much power over the software side of the phones. Honestly, apart from testing compatibility and performance with the networks, carriers have no business even touching the software (or hardware) of the device - leave it up to the people who know what they are doing.

I wish they'd just release an update and put up a link to it online so those that care can just update it when its out as opposed to relying on your carrier to get it to you (Rogers still hasn't gotten it to one of my Lumia 920s).

To be honest I wouldn't call what Windows Phone has 'bloatware'. Android has bloatware. Windows Phone has preloaded, sandboxed apps that have no access to pollute the rest of the phone as the operators don't have access to the OEM SDK.

Indeed not, I was further elaborating about the initial issue. The branding implementation on smartphones is nefarious and MS should completely overhaul it. Giving users updates as Apple does with the iPhone would be more effective than all the money spent in advertising.

Seeing as how AT&T's Lumia 920 is basically the ONLY phone that hasn't gotten this, it might be safe to say that it is squarely on them, no matter how much we wish Microsoft / Nokia could have kept to the update statements, it's not their network...I'm fairly certain most of the Non-carrier 920 got the update? If I'm wrong then I apologize... U_U

...and what if they ended up breaking things, making them not work...ruining the experience just to cram in things that of course have been standard everywhere else but on their new baby. Its one thing to say all this and another thing to screw it all up just for you mate. =/

Wasn't that quote made in reference to when the iPhone didn't have an SDK for making 3rd party apps? Remember initially that Steve Jobs ordained that HTML5/JS websites would be the only future for iPhone apps. So I feel like Ballmer gets some undeserved flak for his early quotes on the iPhone. They were made when the iPhone cost like $500 on contract and didn't allow 3rd party apps. If Apple hadn't corrected those two important issues, then the iPhone would have never seen the success it has.

Very true. When I see their current marketshare problems I always find myself wishing MS had taken different steps in the past. But then I have to remember that if they weren't in such an underdog position, we wouldn't be seeing the great innovation from them that we have. IE6 is the best lesson. It was too successfull and it let MS just sit on their asses, letting innovation slide. Since Firefox and Chome have kicked IE in the ass, we now have great yearly releases like IE9/10/11.

WM was a great business device. What Ballmer did not see coming was the consumerization of IT and the huge consumer potential in general. Apple nailed the iPhone by targeting the emotions of consumers. Combining an iPod with a phone was a great idea that Microsoft certainly could have done before Apple, but didn't. Sure, WM could play music, but it didn't have the storage capacity required to replace the iPod.

Yes, over a year after the iPhone launched. I had a Tilt II from 2009 that came with almost no storage, which was the norm for WM. MicroSD cards in those days weren't exactly cheap, either. Plus, Wealthy Joe Non-Tech (who the iPhone is aimed at) wouldn't even know to get a MicroSD card. The original iPhone out of the box could replace your iPod. This was its huge benefit at launch. It didn't have an app store, it didn't have a camera, and it could not work with MS Exchange. It was simply a phone and iPod in one device, which was very appealing at the time.

I was using it in a factory environment. Writing applications that could check plant production parameters and such, and since corporate IT wouldn't give me a way to get through the firewall, it only worked on WiFi in the plant. Later, we set up a web service on the outside, and sent numbers out, so that the plant management could see them read-only as a very simple web site. That at least got the plant manager to stop calling me at 2am to ask what the numbers were for the prior hour..... Man, those were the days.